A Message from the Broker, Andrew Zsolt
One in four Real Estate advisors believe that 25 percent or more of luxury properties are purchased by foreign buyers.
When asked about activity over the last decade, 66 per cent of real estate advisors believe foreign buyer activity increased in their region since 2005. Almost a quarter (24 per cent) of advisors surveyed believe that 25 per cent or more of luxury properties in their area are purchased by foreign buyers. Over half of the advisors polled (51 per cent) cited China as the primary international region generating real estate purchases in Canada. Looking forward, 60 per cent of advisors anticipate increased foreign buyer activity in their region this year.
“While the impact of foreign buying on Canada’s overall residential real estate market is small, we see it growing in importance in the luxury market,” said Phil Soper, president and chief executive officer, Royal LePage. “Canada’s stable political and financial systems, along with a tradition of cultural tolerance and openness to immigration and diversity, make our country an ideal destination for wealthy international purchasers looking to invest in real property. Recently, a lower Canadian dollar has made this proposition even more attractive.”
The survey also explored trends in luxury real estate sales volumes. According to the report, 67 per cent of real estate advisors stated that luxury property sales activity has increased since January 2015. Current activity is in line with the long-term trend, as the survey also found that 80 per cent of advisors surveyed stated that activity in this category has increased since 2005.
“Despite economic volatility, Canada’s luxury real estate market is healthy and active,” continued Soper. “In times of uncertainty, we can see potential home sellers sitting on the sidelines, and as a result available inventory is constrained. That is not the case in today’s luxury market.”
The survey found that the majority (84 per cent) of advisors believe that luxury properties are used as primary residences, with almost all (97 per cent) characterizing buyers as couples, and a majority (66 per cent) maintaining that luxury buyers have children living at home. In line with use as a primary residence, 74 per cent cited “detached home” as the most desirable luxury property type. The most commonly cited feature that buyers look for was “popular neighbourhood” (53 per cent), followed by “size of house” (42 per cent).
“Downsizing” was the most common reason cited for sellers listing their luxury properties (selected as the number one reason by 66 per cent of advisors). In a related finding, survey respondents said the most common age range of sellers was 55 to 64 (53 per cent), while the most common age range of primary decision makers looking to purchase a luxury property was 45 to 54.
“Real estate ownership can satisfy both housing needs and investing goals,” said Soper. “While market conditions and economic outlooks matter, we have found that luxury property ownership is predominantly driven by the desire to create a happy family home.”
“In our country’s largest housing markets, conditions have made the jump to luxury easier,” added Soper. “Average house prices in the standard category have appreciated at a faster rate than those in the luxury category, narrowing the gap and making higher-priced homes more accessible.”
The Royal LePage Carriage Trade Luxury Properties Report also outlined regional trends, as Canada comprises a number of different markets, each with its own set of economic and demographic drivers.
For a copy of the full Royal LePage Carriage Trade Luxury Properties Report, click here
[Continued in a future issue of the Terrequity Realty Insider]
About Royal LePage
Serving Canadians since 1913, Royal LePage is the country’s leading provider of services to real estate brokerages, with a network of over 16,000 real estate professionals in more than 600 locations nationwide. Royal LePage is the only Canadian real estate company to have its own charitable foundation, the Royal LePage Shelter Foundation, dedicated to supporting women’s and children’s shelters and educational programs aimed at ending domestic violence. Royal LePage is a Brookfield Real Estate Services Inc. company, a TSX-listed corporation trading under the symbol TSX:BRE.
For further information, please contact:
Kaiser Lachance Communications
 For the purposes of the Report, “foreign buyers” are defined as buyers who live outside of Canada all, or most of the time.